Abstract
Introduction. Many businesses nowadays struggle to develop an effective pricing strategy that would boost their sales volume and improve profitability. Some of them may overcharge for their products and services, and usually chase customers away with their profit-hungry image. Others may undercharge as they either do not recognize the value they provide to a customer or simply deliver a below-the-standard project/service. Nevertheless, traditional pricing based mainly on the cost of production is a thing of the past as customers’ needs and demands constantly change and what they would like may no longer be expensive to produce. As such, it is important to focus on psychological factors to understand the value customers are looking for and then amplify on those values when determining the right pricing strategy. Theoretical analysis. The theoretical management principles were determined as the patterns of subjects’ behavior for the strategic management planning, value chain management, manufacturing and sale of products and services. The theory of managing a pricing strategy has proposed a number of tools to optimize the integrative framework for profit driven B2B pricing model, which allows developing a value chain management strategy for digital marketing agencies. Methodology. The basic statement of the problem determining strategic pricing methods for digital marketing agencies, depending of various factors is given. Results. During the research the authors explore several pricing strategies for digital marketing agencies and different online services they provide. The purpose of this article is to shift from traditional to strategic pricing methods for digital marketing services, which nowadays require flexibility, critical thinking, agency’s role in the process understanding, the value they provide, and a total scope of work, including time and resources invested in the completion of a project.
Highlights
Many businesses nowadays struggle to develop an effective pricing strategy that would boost their sales volume and improve profitability
With that being said, developing an effective pricing strategy starts in understanding what customers truly value; using such a lever to increase profitability and sales volume, especially in digital marketing industry where such value can be ambiguous and, hard to recognize at times
Website design and development is a complex process with many variables, which can make creating a value chain management strategy slightly complicated
Summary
Many businesses nowadays struggle to develop an effective pricing strategy that would boost their sales volume and improve profitability. The purpose of this article is to shift from traditional to strategic pricing methods for digital marketing services, which nowadays require flexibility, critical thinking, agency’s role in the process understanding, the value they provide, and a total scope of work, including time and resources invested in the completion of a project. Strategic pricing is a model that encompasses proactive measures to create the conditions under which better and more-profitable pricing outcomes are the natural results It is based on the idea of setting a price for a product/service based on its value to the customer or on competitive strategy rather than solely on the cost of production. With that being said, developing an effective pricing strategy starts in understanding what customers truly value; using such a lever to increase profitability and sales volume, especially in digital marketing industry where such value can be ambiguous and, hard to recognize at times
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